The Apple move this week to take two of the most seasoned Sony Pictures Television (SPT) Presidents on board, reeks of a business which is following, not leading. Clearly the move is about creating original content for Apple, but beyond that there is no clear indication of how Apple will leverage that in the market.
There must have been a conversation with both Jamie Erlicht and Zack Van Amburg, but it could have been as brief as pointing to Apple’s cash hoard and talking about making a ton of content and putting it through either a new, or even an existing delivery route. We were not flies on the wall of those conversations, but in TV, the expression that Content is King, can no longer be forgotten, given what Netflix has done since it came to realize that ancient truth.
Ten years ago the studios were terrified of the internet, now they see it as the future of all digital distribution – but so few companies have done anything original. Netflix first went to market with free online, then paid online, during which time the extent to which it relied on Sony and Disney content became painfully obvious, so much so that Netflix has to embark down a route of original content creation, now spending upwards of $6 billion a year on it.
Apple can follow Netflix and spend that type of money on content, but as a follower rather than a market leader, it is still difficult to see where Apple goes with this change in direction. If it apes Netflix entirely it can simply put this content into a subscription service, price it below Netflix and take the market by storm. There remains the question, however, of how will it leverage its technological edge to accelerate uptake?
At Apple, whatever the question, the answer is always the same. It will deliver this content entirely to Apple devices, limiting the content to its device market share. Netflix has no such limits, and global rights that even Sony must find intimidating. Which means Apple has little or no edge.
If putting it on Apple devices was enough, then Apple Music would have killed Spotify by now or at least overtaken it. It hasn’t and the indications are that it won’t – Apple Music has perhaps already peaked.
Erlicht and Van Amburg will lead Apple’s video programming worldwide, reporting to Eddy Cue, and since they already know how to create good content, that’s what they will keep doing.
Imagine if Apple could boast titles like Breaking Bad, Better Call Saul, The Crown and Rescue Me. Those titles were created for Sony by these two men, and their extensive contact list of talent, many of which have driven audiences at Amazon, Hulu and Netflix.
To us this looks like Apple has tried to get content on its own terms for the past 7 or 8 years and failed and the only way to get that content is to create it. But with no obvious business model and a reluctance from the wider studio population to get into bed with Apple (because of those terms) this looks like it is the creation of content first, and the decision about what to do with it second. That’s the kind of logic that has led to experiments like the Xbox (never made money) the Apple TV (the device destined forever to be just a hobby) and Apple Maps (never got finished).
Erlicht and Van Amburg have both been Presidents at Sony SPT since 2005, and during that time the studio has doubled its original network primetime series. They have Emmy’s galore between them. But here’s the rub – perhaps being at SPT no longer has the certainty that it once had, given it is one of Sony’s few profitable segments. Perhaps it was time to take the money and head for a richer parent.
Questions have inevitably been asked at Netflix as the roster of talent and the list of original works has risen. At Apple, that amount of money will barely raise an eyebrow – but let’s see if it can resurrect the idea that Apple still has design panache and original ideas. We somehow doubt it.